Corporate Recovery

If your business has run into financial difficulties then Blacks Solicitors’ Insolvency team can help.

Occasionally a company with a sound business idea can run into short term financial difficulties. In such a scenario your options are as follows:

Company Voluntary Arrangements (CVAs)

You may enter into a CVA, which is a formal agreement to pay creditors over an agreed term. It allows you to continue to trade in the short term, provided the arrangement isn’t breached, and provides a platform for your company to build upon for the future.

A CVA will bind all creditors and helps limit the possibility of a more formal insolvency event. It is an easy process for you to go through with relatively low costs involved, in comparison with other more formal insolvency events.

The CVA procedure gives you breathing space from your creditors and time to formulate a carefully considered arrangement, which is attractive to creditors.

Administration

Administration is a procedure which allows an independent Insolvency Practitioner to run, reorganise and sell your company (where possible). Your company will benefit from a moratorium (a stay on proceedings) which allows you to operate in a protected environment.

The aim of Administration is as follows:

Rescuing the business as a going concern

Achieving the best result for creditors as a whole

Making distributions to creditors in a Statutory Order

The need to enter into Administration can sometimes be extremely urgent. Therefore, you will need an experienced legal team to guide you through the procedure.

Administrative Receivership

Administrative Receivership is a remedy for creditors. It allows for the realisation of your company’s assets, subject to security. Receiverships are now very rare and are only available to those with a qualifying charge created prior to 15 September 2003.

If a floating charge is created on or after 15 September 2003, Administrative Receivership is no longer available as a remedy to enforce that security.

Instead, a qualifying floating charge holder can place the company into Administration.

Liquidation

Liquidation is a formal procedure known more commonly as ‘winding-up’. Liquidation is a last resort where your company’s assets are realised for your creditors and the affairs of the company are brought to a close.

A common misconception is that Liquidation is only available to creditors, but this is not the case. There are three alternative routes into Liquidation as set out below:

Compulsory Liquidation – commenced by a petitioning creditor and by Order of the Court only

Creditors’ Voluntary Liquidation – commenced by an insolvent company where directors are unable/unwilling to give a statutory declaration of solvency

Members Voluntary Liquidation – commenced by a solvent company were the members of the company wish to cease trading

There are a number of detailed procedural requirements to each of the above processes.

The effect of the Liquidation is that directors’ powers cease and the Liquidator will take over the running of the company. Director’s appointments may be terminated.

It is difficult to give an estimate of how long a Liquidation may take however they can last a matter of months, or in exceptional cases for two to three years. The liquidation will conclude when:

All assets are/have been realised

Dividends are paid to the creditors

A final meeting of the creditors/members has been held

The Liquidator is released by meeting/Court

The final accounts of the company are filed with Companies House

The company is dissolved

For more information about any of the above, or for a free no obligation discussion, please email or call Blacks’ Insolvency team today on 0113 207 0000.

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Blacks Solicitors LLP. Registered in England and Wales no. OC309566. Registered office: City Point, 29 King Street, Leeds, LS1 2HL where a list of members is open for inspection. Authorised and regulated by the Solicitors Regulation Authority no. 419628.